<b>Amit Sinha & Parijat Jain:</b> Try short-term power trading

Optimising the procurement of power from short-term markets will help India's ailing discoms

While India is expected to have its first-ever power surplus in 2016-17, with the overall energy surplus and peak surplus forecasted to be 1.1 per cent and 2.6 per cent respectively, the penetration of short-term markets in power remains low and calls for the attention of policymakers. Short-term markets refer to contracts with a duration of less than one year, and consist of bilateral contracts between a buyer and seller, and power trading on exchanges.

Compared with countries in Europe, where volumes traded on short-term markets range from 23 per cent to as much as 88 per cent as of 2015,